OTTAWA – Canada’s ministers of finance and procurement, François-Philippe Champagne and Joël Lightbound, have directed federal contracting officials to devise a comprehensive plan within 45 days. This plan will aim to review both existing and upcoming federal contracts, identifying potential savings to enhance the nation’s financial efficiency.
This initiative is part of a larger cost-reduction strategy, as Prime Minister Mark Carney has mandated a 15 percent cut in government operating expenses over the next three years. The request was formalized in a letter on Thursday addressed to key officials, including the deputy minister of public services and procurement, the chief information officer, and senior representatives from the Treasury Board and Shared Services Canada.
Champagne and Lightbound emphasized that the proposed plan should incorporate a systematic approach to evaluate current and future contracts with a focus on cost-savings. This assessment will draw upon international best practices in procurement and prioritize solutions available from Canadian vendors.
The ministers stressed the importance of renegotiating contracts in sectors with significant savings potential, specifically in information technology (IT), real estate, construction, and travel. Additionally, they called for the establishment of a framework to engage with provinces and territories, leveraging their collective buying power for major procurement contracts, while also prioritizing digital procurement solutions.
In a statement to The Canadian Press, Champagne highlighted that the federal government is among Canada’s largest purchasers, spending over $66 billion annually on goods and services. He articulated that the review of all contracts is a vital step towards minimizing operational expenditures and enhancing the value delivered to Canadians. “This is another step in building a more efficient government that delivers for Canadians,” he stated.
In July, federal procurement ombud Alexander Jeglic advocated for a substantial overhaul of Canada's procurement system, criticizing the government for its inaction despite being aware of longstanding issues. Jeglic asserted that the nation needs to improve its mechanisms for reviewing and reporting on the performance of contracted companies and personnel.
Recent years have seen numerous troubling instances related to federal contracts, including the escalating costs associated with developing the ArriveCan app during the COVID-19 pandemic. A federal audit concerning those contracts condemned the overall procurement system in place. This context underscores the urgency of the ministers’ directive for a thorough review and reform in federal contracting.
The implementation of this plan could lead to significant savings and a more accountable procurement system, essential for ensuring that Canadian taxpayers receive greater value for money spent on federal contracts. The upcoming weeks will be crucial as officials work towards fulfilling this directive.
